A complaint was filed on May 2 through the U.S. District Court for the Northern District of California against Nahla Droubi, the landlord of the property that houses the dispensary. The lawsuit threatens to seize the property for allegedly violating federal law, which prohibits operating a marijuana dispensary.

Berkeley City Council members and representatives from Berkeley Patients Group held a press conference Wednesday afternoon in front of the Old City Hall expressing their opposition to the lawsuit.

“There is no legitimate reason to target Berkeley Patients Group,” said Sean Luse, chief operations officer at BPG. “They’re in compliance with state law. The U.S. attorney general … has chosen to hurt our patients by diverting attention from the real issues.”

Berkeley Patients Group also came into opposition with the federal government in February 2012, when it received letters from the U.S. attorney’s office for violating a federal law banning dispensaries from being located within 1,000 feet of a school. Even though California law dictates that the distance only has to be 600 feet, the dispensary voluntarily closed down and reopened at a new location in December a few blocks away.

According to the complaint, the U.S. attorney began sending Droubi letters again in November 2012 before the new location opened, warning that the new location would be in violation of the same federal law by being within 1,000 feet of two preschools. A second letter sent in February noted that the group could face criminal and civil penalties if operation continued.

Luse said that the federal government should focus its attention on other crime problems in the city, like illegal drug and gun trafficking. He also said that they plan to fight the lawsuit.

“We look forward to having our day in court and believe we will ultimately prevail,” Luse said.

City Councilmembers Darryl Moore, Kriss Worthington, Laurie Capitelli and Jesse Arreguin voiced their backing of Berkeley Patients Group at the press conference. Mayor Tom Bates also showed his support for the dispensary.

“I’m very, very disappointed that this has happened, and we’ll do anything we can to make sure they get back into business,” Bates said.

Councilmember Kriss Worthington said that the federal government was overstepping its boundaries, referencing the recent California Supreme Court ruling on City of Riverside v. Inland Empire Patients Health and Wellness Center. In the ruling, the court recognized the legality of medical cannabis dispensaries but allowed that local governments may ban dispensaries despite state law.

“Being a U.S. attorney doesn’t give you the right to change state law or city law,” Worthington said. “It’s so absurd. It’s a waste of time, and it’s threatening patient care.”

In the meantime, the dispensary will remain open, according to Henry Wykowski, attorney for Berkeley Patients Group.

“The only people that would benefit from the closing of Berkeley Patients Group are the gangs and cartels,” Wykowski said. “This action will cause them to prey on the patients who now have a clean, safe place to get their medicine.”

The federal government filed a similar lawsuit against a medical marijuana dispensary in Oakland last July. The city of Oakland filed a lawsuit in response, claiming that the federal government had overstepped its jurisdiction. A federal judge later dismissed the lawsuit, saying that only the dispensary and its landlords could contest the government’s seizure of property.

Wykowski said that they intend to file a claim in response to the lawsuit and will also present their case in court.

Contact Tara Hurley at thurley@dailycal.org.

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The suit, filed on Oct. 10 in the U.S. District Court for the Northern District of California, could affect all dispensaries in California — including the three medical cannabis dispensaries in Berkeley — after a federal crackdown on cannabis dispensaries began last fall. The crackdown negates a promise by the Obama administration not to raid dispensaries in compliance with state law and guidelines.

Harborside Health Center, the largest medical marijuana dispensary in California, located at 1840 Embarcadero in Oakland, has embroiled itself in a lawsuit against the U.S. Department of Justice, which issued a memo in June 2011 stating it would enforce federal laws relating to medical cannabis regardless of state laws.

Berkeley Patients Group, the oldest and largest Berkeley dispensary, voluntarily closed last May after receiving letters from the U.S. Attorneys’ Office. The dispensary has plans to reopen, despite continued pressure from the federal government.

The Berkeley dispensary received letters earlier this year stating that it was in violation of a federal law mandating that dispensaries be located 1,000 feet away from schools and playgrounds — California’s minimum requirement is only 600 feet away.
Berkeley City Councilmember Jesse Arreguin said Berkeley’s situation is different from that of Oakland because Berkeley has not had any raids or forcible closures.

“We have not discussed (filing a suit), and I don’t think we would,” Arreguin said. “Unlike the situation in Oakland, the federal government has not shut down dispensaries in any raids here. Berkeley’s situation is different.”

However, Arreguin said he feels the council should support the lawsuit and file an amicus curiae — or a “friend of the court” — which would allow Berkeley to publicly show its support in the Oakland lawsuit.

“It’s unfortunate what happened in Oakland,” Arreguin said. “I hope it doesn’t happen in Berkeley, but we need to speak out about it. It’s a very tenuous time for patients and providers of medical cannabis because there’s a lot of uncertainty of what’s going to happen next.”

Though the chances of Oakland winning the lawsuit are slim, the suit could prove to be beneficial to dispensaries everywhere because the case shows the city of Oakland taking a stand, said Charlie Pappas, a member of the Berkeley’s Medical Cannabis Commission.

“It’s a real lawsuit, and most of the elected officials won’t even write a letter,” Pappas said. “A few have, but this is real action. It might not help dispensaries be more legal, but it might help them fight back more.”

Additionally, Kris Hermes, spokesperson for Americans for Safe Access, said Oakland’s lawsuit could relieve some pressure from Berkeley dispensaries.

“Currently, they are in fear that at any moment the federal government could threaten their landlords to evict them, as the Justice Department has done in literally hundreds of locations around the state,” Hermes said.

Though Berkeley Patients Group was the only dispensary to close in Berkeley, they did so voluntarily — unlike many dispensaries across the state that have been forcibly shut down or raided.

“It’s a practical fight as well as a symbolic fight,” Hermes said.

Contact Ally Rondoni at arondoni@dailycal.org.

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Although a date of reopening has not yet been determined, construction to renovate the interior and exterior areas of the new property at 2366 San Pablo Avenue in the commercial district has already begun.

According to a permit application submitted in July by Sean Luse, chief operating officer for the dispensary, BPG applied to remove and replace the asphalt parking lot and renovate the interior and exterior structures of the building, such as placing new tiles and adding doors to make it accessible for disabled people. The estimated exterior cost of renovations is $49,000, according to the application.

“BPG has and will continue to be a positive community resource serving patients in the City of Berkeley and the surrounding region,” reads a BPG press release.

Last fall, the U.S. Department of Justice began a statewide effort to enforce regulations on the the marijuana industry throughout California and sent letters to owners of commercial marijuana stores that they were not complying with federal laws and could be subject to closure.

BPG closed May 1 after receiving a letter from the U.S. Attorney’s Office warning the dispensary that it was in violation of a federal law that stipulates that dispensaries cannot be located within 1,000 feet of schools and playgrounds, although California law only requires a 600-ft. distance between schools and dispensaries. Since its closure, the dispensary has continued to operate through delivery services.

According to the press release, the dispensary’s new location will be more than 1,000 feet away from all elementary, middle and high schools.

BPG will also have a security guard stationed 24 hours per day for seven days a week to monitor the property, according to the release. The release states an eight-foot fence complete with an alarm system will surround the area and security cameras will be operated by a 24-hour remote.

Although neighbors have expressed some concerns regarding how the establishment may affect their businesses, the press release states the dispensary is “committed to working proactively” with the community.

Berkeley Patients Group could not be reached for comment as of press time.

“(BPG) intends to (reopen), and I would encourage them to,” said Dan Rush, chair of the Berkeley Medical Cannabis Commission and director of the Medical Cannabis and Hemp Division at United Food and Commercial Workers International Union.

According to Charles Pappas, a member of the commission, the commission will meet in September for further discussion regarding the move.

Last week, Congresswoman Barbara Lee, D-Oakland, introduced the Medical Marijuana Property Rights Protection Act, which would prevent the U.S. Department of Justice from using forfeiture laws to seize property from medical marijuana dispensaries that are compliant with state laws.

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The legislation — introduced by Congresswoman Barbara Lee, D-Oakland, and eight co-sponsors on Aug. 2 — would prevent the U.S. Department of Justice from using forfeiture laws to seize property from medical marijuana dispensaries that are compliant with state laws. The bill would not apply to dispensaries that do not follow state regulations.

“We should be protecting and implementing the will of voters, not undermining our democracy by prosecuting small business owners who pay taxes and comply with the laws of their states in providing medicine to patients in need,” Lee said in a press release.

Berkeley Patients Group, the oldest and largest of Berkeley’s three medical cannabis dispensaries, closed May 1 after receiving a letter from the U.S. Attorney’s Office warning the dispensary that it was in violation of a federal law that stipulates that dispensaries cannot be located within 1,000 feet of schools and playgrounds. However, California law only requires a 600-ft. distance between schools and dispensaries, and the dispensary has continued to operate via delivery.

On Oct. 7, 2011, the U.S Department of Justice announced a statewide effort to enforce regulations on the marijuana industry throughout California, which has resulted in contention between federal and state law. Since its announcement, the U.S. Department of Justice has sent letters to owners of commercial marijuana stores, warning them that they were not complying with federal laws and could be subject to closure, according to the department’s press release.

“Although all marijuana stores are illegal under federal law, I decided to use our limited resources to address those that are in close proximity to schools, parks and playgrounds and operations so large that they constitute marijuana superstores,” said U.S. Attorney Melinda Haag in a statement.

According to Kris Hermes, spokesperson for Americans for Safe Access — a group that advocates for the legal use of medical marijuana nationwide — more than 400 cannabis dispensaries have been shut down across the state since May 1, with well over a dozen in the Bay Area.

Last month, federal authorities moved to seize Harborside Health Center in Oakland — one of the largest dispensaries in California — and just last week, two dispensaries in San Francisco were shut down.

Hermes said despite hundreds of letters sent, the U.S. Department of Justice prosecuted fewer than 10 property owners and took action on only a handful of marijuana stores.

“That’s been the weapon that the federal government has used to close some of the most popular dispensaries in the area … (but) the dispensaries abide by local laws and pay their taxes,” said Dale Gieringer, director of the California chapter of the National Organization for the Reform of Marijuana Laws.

The bill is being considered in committees, but many speculate that chances of the bill even passing through the committees are slim due to the Republican majority in Congress.

However, Dan Rush, chair of the Berkeley Medical Cannabis Commission and director of the Medical Cannabis and Hemp Division at United Food Commercial Workers International Union, said support for the bill has gained momentum statewide.

“Congresswoman Lee is a hero,” Rush said. “She is defending union jobs, workers, and patients and … she’s found more and more support among congress members because this is the right thing to do.”

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Reports last month that BPG — the oldest and largest of Berkeley’s three dispensaries — had received a letter from the federal government last fall led many to speculate that the business had been warned they were operating in violation of federal law that requires a 1000-foot distance between schools and dispensaries, which would mean the dispensary would most likely have to relocate. The dispensary is located around the corner from two schools.

Documents revealed this week that the dispensary had signed an agreement Feb. 28 with the property owner for the dispensary’s location at 2747 San Pablo Ave. to vacate by May 1, 2012.

Dispensary officials have declined to comment on the details of the letter but said in a press release issued Thursday night that “BPG is not closing. We have been looking to relocate for several years and look forward to announcing our new site, soon. We are grateful for the level of support we have received from the Berkeley community over the years.”

In the press release, Sean Luse, chief operating officer for the dispensary, said that “Berkeley Patients Group remains dedicated to providing safe and affordable access to its patient-members, while working to preserve the jobs of its 70+ employees.”

Many city officials and neighboring businesses have praised the dispensary for its professionalism and generous donations to the community.

Sean Bryson — who manages the Berkeley Tattoo Parlour across the street from the dispensary — said that the 24/7 security the dispensary provides make many in the area feel safer.

“It’s funny that they’re not supposed to be near schools, but when they’re run well, they actually improve safety in the neighborhood,” Bryson said.

Many have said the current federal restrictions on dispensaries will greatly limit the locations Berkeley Patients Group can relocate to in the city.

“We strive to operate a dispensary that is a model of compassion and legal integrity. BPG operates in strict compliance with the letter and the spirit of California’s medical cannabis laws,” the press release reads.

Adelyn Baxter is the lead city government reporter.

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Berkeley has already begun to see the effect of federal lawmakers butting heads with officials in states where medical cannabis has been legal for years. The debate boils down to disagreement between those who advocate state’s rights in medical cannabis regulation and federal entities reluctant to leave the management of any kind of drug — illicit or medical — up to differing interpretations between regions.

However, reports that Oakland intends to double the number of dispensaries it licenses should come as no surprise given the financial difficulties that California cities have faced in recent years. In cities like Oakland, annual sales taxes from marijuana dispensaries generate millions.

Alternatively, the tax revenue Berkeley brings in from medical cannabis is “really not significant” to the city’s overall revenue, totaling just $161,193 in 2011, according to city spokesperson Mary Kay Clunies-Ross.

Last fall, the U.S. Department of Justice sent letters to dozens of dispensaries and collectives across the state, warning owners they were not complying with federal standards and could be subject to closure and even jail time if they did not close down their businesses immediately. Several San Francisco businesses closed as a result.

Dan Rush, the national director of the Medical Cannabis and Hemp Division at United Food Commercial Workers International Union, estimates that the letters could put roughly 300 Berkeley dispensary jobs at risk. Another round of letters was just sent out last week, the effects of which will become apparent in the coming months, Rush said.

Berkeley currently has three dispensaries, but the city is in the process of developing regulations to permit a fourth dispensary in line with Measure T, a ballot measure passed in November 2010 that also allows six new cultivation centers to open in the city.

The city has charged its Medical Cannabis Commission — for which Rush is also the chairperson — with the task of defining regulations, to be submitted to and voted on by the City Council later this year. The process appears to have been delayed by the lack of clarity at the state level.

“There’s been discussion about calling a break until there’s some kind of ruling from the Supreme Court,” Rush said at a meeting of the commission Thursday.

However, commissioners seem determined to continue refining the process for businesses looking to apply for a dispensary permit.

The distinction between dispensaries and collectives varies from city to city. In Berkeley, dispensaries are permitted establishments that operate in commercial districts, while collectives must be operated out of a residence outside of a commercial or manufacturing district.

In December, the city sent “cease and desist” letters to two local collectives, warning that they were wrongly operating as dispensaries and would be subject to a fine of $500 a day if they did not halt operations immediately.

Perfect Plants Patient’s Group at 2840-B Sacramento St. was one of the collectives identified. It was also notified that it was violating Measure T’s stipulation forbidding it from operating within 600 feet of a school.

40 Acres Medical Marijuana Growers’ Collective was the other collective that received a letter warning that it is violating the city’s municipal code by operating as a dispensary in a commercial district. The collective closed its doors at 1820 San Pablo Ave. and reopened recently at a new location.

Although no Berkeley dispensaries have closed yet, rumors have circulated that Berkeley’s largest and oldest dispensary — Berkeley Patients Group — recently received a letter from the U.S. Attorney notifying them that they are in violation of the 1,000-foot limit between dispensaries and schools stipulated by federal law.

BPG has yet to confirm whether or not they have received such a letter.

A bill submitted by state assemblymember Tom Ammiano (D-San Francisco) to the state assembly on Feb. 24 could alleviate some of the confusion between state and local policies for medical cannabis.

The Medical Marijuana Regulation, Control, and Taxation Act of 2012 would establish a state Board of Medical Marijuana Enforcement, which would deal with registering and regulating medical marijuana businesses as well as levying fines and penalties for violations, according to the bill’s text.

Adelyn Baxter is the lead city government reporter.

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According to the lawsuit, which was filed with a Maine county court July 6, Maine’s Northeast Patients Group has neglected to repay several loans lent by the Berkeley group, in addition to allegedly revealing trade secrets to a competing company. None of the four dispensaries scheduled to be run by the Maine group have opened.

The court documents state that while the Northeast Patients Group understands that the monetary support provided by the Berkeley group was a loan and not a grant, it has yet to pay back the over $630,000 provided to them over the course of the last two years.

The Berkeley group has operated as a medical marijuana collective in California for over 11 years. Brad Senesac, chief marketing officer of the group, said in an email that the group cannot comment on the lawsuit due to the pending litigation.

The court documents state that Northeast’s Chief Executive Officer Rebecca DeKeuster — a former member of the Berkeley group’s Board of Directors as well as a former executive employee — was appointed to her position in Maine under a written Employment Agreement by Berkeley Patients Group.

DeKeuster was asked by the Berkeley group to move to Maine in order to help open dispensaries there, according to the court documents. She was paid a starting salary of $111,000, commencing in November of 2009. By May of 2010, her salary was increased to $125,000, according to her employment agreement.

DeKeuster has allegedly breached that agreement by “acting against the interests of BPG, acting for her own interests, and using her position of trust and responsibility owed to BPG to instead cause BPG to enter into business relationships with third parties,” according to the court documents.

The agreement states that DeKeuster was to work in Maine for the benefit of the Berkeley group and not “engage in any practice that competes with (the Berkeley group’s) interest.”

According to the court documents, DeKeuster “entered into a Letter of Intent with a competing group,” thereby breaching the agreement. The documents state that DeKeuster resigned from the Berkeley group on Feb. 24, which the suit states is on or about the same day she allegedly breached her agreement with the letter.

“DeKeuster, acting as Director of NPG, entered into negotiations with a competing business group to provide the same services, business support and activities to NPG that had been orally  agreed to by NPG and BPG since the spring of 2010,” the documents state.

Under the agreement, DeKeuster had agreed “not to undertake any actions in competition with the interests of BPG, either herself or in combination with others, while employed by BPG and for a period of 24 months after ceasing employment.”

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